Complete I really need to do the inbound validation of invoices? is one of the most often asked questions at almost every conference in Mexico about e-Invoicing.
Many businesses believe they are not required to do incoming validations, although doing so might result in jail time and hefty fines.
For inbound invoices, Mexico CFDI faces two realities:
- The present articles theoretically do not require validation.
- However, validation is the only way to guarantee you pay your taxes honestly and prevent engaging in fiscal fraud.
So, judgements shouldn’t be based on technological compliance. It should be a financial choice instead. In Mexico, you pay taxes depending on the net difference to the government (i.e. the tax you charge your customers minus the tax that you pay your suppliers).
Not confirming each and every inbound invoice, if you are deducting these tax payments from your revenue, is the equivalent of setting off a “audit bomb” and then dousing it in gasoline.
On the outbound invoices, Mexico has been moving further in the direction of the Brazil NFe model over the past 12 months. Under this approach, permissions are needed before a vehicle leaves a warehouse. In the upcoming months, we anticipate comparable compulsory legislation for inbound processing to be implemented in a more formal technical architecture. This, however, is not a good reason to delay the introduction of incoming validation. Immediately begin this.
Your suppliers must provide you with the XML invoice in Mexico starting with version 3.2. Email is the customary method for doing this. However, a lot of businesses are looking towards upload portals and EDI connectivity to streamline their collection process. After receiving this XML, you can verify the signatures, specific values, and post the verified signatures’ returned signatures in your system of record. This will guarantee that all of your invoices and all of the tax deductions you are making are from legitimate and officially recognised invoices in the event that you are ever subject to an audit. The procedure is simple, but far too many businesses put their controllers and fiscal managers in danger of facing criminal charges. Through a quick, 4-6 week effort, all of these can be avoided. Make sure you are aware of the realities of both the technical and financial requirements; these are no longer two distinct challenges.